Supply Chain and Inventory Management Flashcards
7 cards from real ERP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Supply Chain and Inventory Management flashcards as text
Which inventory replenishment strategy triggers an order only when stock falls to a predetermined reorder point?
Answer: Continuous review system
A continuous review system (also called a fixed-order-quantity system) monitors inventory continuously and places an order whenever the reorder point is reached.
In ERP supply chain modules, what does the term 'bullwhip effect' describe?
Answer: Demand signal amplification upstream through the supply chain
The bullwhip effect refers to increasing swings in inventory orders up the supply chain as small demand fluctuations are amplified at each tier.
A company uses ABC analysis for inventory classification. Which class typically represents the fewest SKUs but the highest annual spend?
Answer: Class A
Class A items represent roughly 10-20% of SKUs but account for approximately 70-80% of total annual inventory value.
What is the primary purpose of safety stock in an ERP inventory system?
Answer: Buffer against demand variability and supply uncertainty
Safety stock acts as a buffer to protect against stockouts caused by unpredictable demand spikes or supplier delivery delays.
Which supply chain metric measures the percentage of customer orders fulfilled completely and on time?
Answer: Perfect order rate
The perfect order rate measures the percentage of orders delivered complete, on time, damage-free, and with accurate documentation.
In MRP logic, what is the difference between gross requirements and net requirements?
Answer: Net requirements equal gross requirements minus on-hand inventory and scheduled receipts
Net requirements are calculated by subtracting available on-hand inventory and scheduled receipts from gross requirements.
Which procurement method involves a long-term agreement with a supplier that sets pricing and terms but releases shipments as needed?
Answer: Blanket purchase order
A blanket purchase order establishes pre-negotiated terms and pricing with a supplier, allowing the buyer to release individual shipments against it over time.